Monetary policy is defined as
A)the rules regarding borrowing and lending at banks.
B)those policies which limit the interest rates banks may pay on deposits.
C)the Federal Reserve's efforts to promote the overall health and stability of the economy.
D)the policy regarding to whom net lenders should lend money.

Question

Quizplus · Accepted Answer

Monetary policy refers to the actions taken by the Federal Reserve (the central bank of the United States) to manage the money supply and interest rates in order to promote the goals of maximum employment, stable prices, and moderate long-term interest rates. It includes setting the federal funds rate (the interest rate at which banks lend and borrow funds from one another overnight), controlling reserve requirements (the amount of funds banks must hold in reserve), and conducting open market operations (buying and selling government securities to influence the money supply).

Monetary Policy Is Defined as